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The Bank of England’s monetary committee met again today to discuss the base rate and decided to hold rates at 5.25%. This meeting has always been an important date in the financial calendar, but even more so in recent years.Ìý

Back in December 2021, the base rate was a mere 0.25% and from then we’ve seen a steady increase until it reached 5.25% in August, 2023.Ìý

The increased base rate has been used to tackle inflation as the cost of living increased during 2021 and 2022. Annual rate of inflation reached a staggering 11.1% in October but it has now eased to 3.2% in March 2024.Ìý

All eyes were on the monetary committee today as there were some rumours that they might drop the base rate in May. However, the Bank of England remained cautious as inflation has only decreased slightly from 3.4% to 3.2% since its last meeting.Ìý

Consequently, the committee voted by majority of 7-2 to maintain the base rate at 5.25%. The other two members opted to reduce the base rate by 0.25 percentage points to 5%.Ìý

So, when will the base rate change?

Experts say the next inflation update could be a sharper drop and this might encourage the monetary committee to decrease the base rate in June’s meeting. But, with seven people on the committee still keen to keep rates at 5.25%, it would be a big shift for things to change in one month.Ìý

So, for now, the base rate remains unchanged. This is good news for savers as it gives them another month to make the most of the current competitive interest rates on savings accounts.Ìý

The top interest rates on savings accounts remain above 5%, with some even matching the base rate. It’s always a good idea to move money to an account offering a high interest rate, especially if it’s above inflation. This is because it’ll give the money more purchasing power, so savvy savers should keep an eye out for any accounts above 3.2%.

Luckily there are plenty of deals available.Ìý

Atom Bank is currently offering a six-month fixed-term savings account at 5.25% and it can be opened with just £50. This is great for savers that have a lump sum to save and don’t need to access it for at least six months. Alternatively, for those that want to lock away their money for longer, RCi Bank has a two-year fixed-term account at 5.05% and this can be opened with £1,000. This is a very competitive rate for the next two years, as it’s expected interest rates will drop over the coming months.Ìý

Easy access savings accounts are also attractive for savers who want to access their money when they wish - but with the added bonus of interest. However, bear in mind that the current top rates come with a large opening balance. For example, Oxbury has an easy access account at 5.02% but you’ll need £20,000 to open the account. Similarly, Monument has an easy access account at 5.01% and that comes with an opening balance of £25,000. These accounts are worth exploring if anyone has a lump sum sitting in a current account earning little to no interest.Ìý

Notice savings accounts are also competitive, as they offer high interest rates with no fixed term. Instead, there is just a specific notice period before savers can access their money. Investec continues to offer its 90-day notice saver at 5.25% and this has an opening balance of £5,000.Ìý

Finally, don’t forget about ISAs as these savings accounts still have strong interest rates and tax-free benefits up to £20,000. Plum has a cash ISA at 5.17% and this has a minimum opening balance of £100. Alternatively, Chip has a cash ISA at 5.1% and this can be opened with just £1.Ìý

Remember, these rates won’t last forever, so savers should act quickly if they want to take advantage of interest rates above 5%. Whether they decide to lock in the rate for two years or want easy access to their cash, these will always be better options than leaving money in a low-interest current account.